What is it and where can I buy it?

DeFi derivatives combine the advantages of the decentralized crypto sector with instruments from the old financial world. They enable interested parties to invest in cryptocurrencies without actually having to own them. And all this – if you move on a DEX – without registration.

DeFi derivatives: what is it?

Derivatives are contracts between two parties. They reflect an underlying base value. While in the traditional financial sector these are bonds, commodities, currencies, interest rates, market indices or stocks, in DeFi derivatives these are cryptocurrencies such as Bitcoin (BTC), Ether (ETH) and Co.

In this context, the emergence of smart contracts made it possible for the first time to map derivatives automatically. In contrast to the traditional financial market, decentralized finance (DeFi) does not require any intermediary bodies for the respective DeFi derivatives.

Important to know: Derivatives reflect the value of an asset. This means that anyone who owns a Bitcoin derivative does not own Bitcoin.

DeFi derivatives: what types are there?

Below is a brief overview of the most important crypto derivatives that can be traded in the DeFi sector.

Among the best-known DeFi derivatives are the futures or futures contracts. Two parties conclude a contract that stipulates that they will buy an asset, such as Bitcoin, at a specified price at a specific point in time in the future. You can read more about this in detail here read.

A similar crypto derivative are the options. Here, too, two parties determine a price at which a certain asset will be traded in the future. However, the buyer has the option to withdraw from the purchase. A distinction is made here between call and put options.

the call option allows a trader to trade an asset to buywhile the put option makes it possible to buy the asset at a given point in time to sell. There are two variants. In the american Variant, you can withdraw from trading before the expiry date has expired. In the European However, this is only possible at the agreed time.

Finally, among the crypto derivatives are the Perpetual Contracts to mention. They are very similar to futures. However, in contrast, they have no expiration date.

Derivatives on decentralized exchanges (DEX)

An overview of some decentralized exchanges (DEX) that support crypto derivatives trading can be found here.

syntheticix

Synthetix is ​​a blockchain protocol for synthetic assets. So you can use the platform to map assets via tokens. These can be cryptocurrencies as well as traditional assets such as commodities or the like.

So if you want to create DeFi derivatives yourself on Synthetix, you need the platform-internal SNX token. This is stored in a smart contract and can be used to issue synthesized cryptocurrencies. For example, if you want to create a Bitcoin derivative, deposit SNX and get sBTC for it. These in turn can be traded as you wish.

here let’s go to the platform.

Hegic

Hegic is a DeFi derivatives platform that makes it possible to trade options. You can set call and put options on various cryptocurrencies such as Bitcoin or Ether. You determine in advance at what price you sell a certain cryptocurrency and can thus make higher profits if necessary. Apart from that, it is also possible on Hegic to generate additional income via liquidity mining.

here go to the seller.

DYDX

DYDX is a decentralized crypto derivatives exchange built on the Ethereum blockchain. Those who use DYDX can trade perpetual contracts. It is possible to leverage derivatives and thus increase your chances of winning. Apart from that, DYDX also enables other DeFi applications such as lending cryptocurrencies. The exchange also supports spot and margin trading.

here go to the seller.

Centralized: Contract for Differences (CFD) and Crypto ETP

Futures contracts (Contract for Differences) and Exchange Traded Products (ETP) on Bitcoin and Co. are also derivatives. However, as these are typically traded on Centralized Exchanges (CEX), we have omitted them here.

If you still want to know where you can trade them, check out our comparison sites. For crypto CFD simply use our comparison for the best crypto exchanges and activate the “CFD” filter. For the best crypto ETP providers, head here.